TOKYO -- Fast-growing Japanese discount chain Don Quijote Holdings said it plans to expand in the U.S. and Asia as it announced a name change to Pan Pacific International Holdings to reflect its ambitions.
"Don Quijote will disappear from our company name, so this is an expression of our strong determination," Don Quijote Holdings President and CEO Koji Ohara said at a news briefing to outline the details of an acquisition deal it had tied up with FamilyMart Uny Holdings. Its name change will take effect in February.
FamilyMart Uny on Thursday offered to sell its entire stake in general-merchandising unit Uny to Don Quijote and to take a 20% stake in the discount retailer for 211.9 billion yen ($1.9 billion). Don Quijote will pay 28.2 billion yen for the remaining 60% stake in Uny.
FamilyMart Uny will make a tender offer to buy up to 20.17% of Don Quijote for 6,600 yen a share, for a total 211.9 billion yen. Don Quijote shares jumped 10.4% to 6,680 yen on Thursday, by far outperforming the Nikkei Stock Average that lost 3.8% in a global sell-off.
Don Quijote plans to expand from markets in California, Hawaii and Singapore where it already has a presence. "Don Quijote won't stay in Japan but will build a top-level retailer worldwide," Ohara said, without mentioning specific markets.
But Ohara said that the company will take advantage of existing global partnerships for this expansion. "There are some areas where FamilyMart has expanded and its parent company Itochu has partnerships [in this region]. We will talk with them to advance to the world." FamilyMart has convenience stores in China, Taiwan, Vietnam and Malaysia.
Itochu also has ties with Thailand's biggest conglomerate Charoen Pokphand Group and China's Citic Group.
But Ohara remained coy about expansion plans in China, saying "we haven't considered yet, there is no concrete plan." Yet, the chain store has a huge following in Chinese tourists. And Don Quijote already has built up a relationship with Tencent Holdings which has named the company a flagship partner for its mobile payment service WeChat Pay.
Grace Yin, director of international business at WeChat Pay told Nikkei Asian Review, earlier: "Our flagship partners are limited to one company in one industry. This is a sign of how we much respect Don Quijote."